Napa Auto Parts 2015 Annual Report Download - page 35

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Although the Company does not face material risks related to interest rates and commodity prices, the
Company is exposed to changes in foreign currency rates with respect to foreign currency denominated operating
revenues and expenses.
Foreign Currency
The Company has translation gains or losses that result from translation of the results of operations of an
operating unit’s foreign functional currency into U.S. dollars for consolidated financial statement purposes. The
Company’s principal foreign currency exchange exposure is the Canadian dollar, the functional currency of our
Canadian operations, the Australian dollar, the functional currency of our Australasian operations and, to a lesser
extent, the Mexican peso, the functional currency of our Mexican operations. Foreign currency exchange
exposure, particularly in regard to the Canadian and Australian dollar and, to a lesser extent, the Mexican peso,
negatively impacted our results for the year ended December 31, 2015.
During 2015 and 2014, it was estimated that a 10% shift in exchange rates between those foreign functional
currencies and the U.S. dollar would have impacted translated net sales by approximately $252 million and $258
million, respectively. A 15% shift in exchange rates between those functional currencies and the U.S. dollar
would have impacted translated net sales by approximately $378 million in 2015 and $388 million in 2014. A
20% shift in exchange rates between those functional currencies and the U.S. dollar would have impacted trans-
lated net sales by approximately $504 million in 2015 and $517 million in 2014.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item 8 is set forth in a separate section of this report. See “Index to Con-
solidated Financial Statements and Financial Statement Schedules” beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES.
Management’s conclusion regarding the effectiveness of disclosure controls and procedures
As of the end of the period covered by this report, an evaluation was performed under the supervision and
with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief
Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures, as such term
is defined in SEC Rule 13a-15(e). Based on that evaluation, the Company’s management, including the CEO and
CFO, concluded that the Company’s disclosure controls and procedures were effective, as of the end of the
period covered by this report, to provide reasonable assurance that information required to be disclosed in the
Company’s reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to
allow timely decisions regarding required disclosure.
Management’s report on internal control over financial reporting
A report of management’s assessment of our internal control over financial reporting, as such term is
defined in SEC Rule 13a-15(f), as of December 31, 2015 is set forth in a separate section of this report. See
“Index to Consolidated Financial Statements and Financial Statement Schedules” beginning on page F-1.
The attestation report called for by Item 308(b) of Regulation S-K is incorporated herein by reference to the
“Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting”, which
is set forth in a separate section of this report. See “Index to Consolidated Financial Statements and Financial
Statement Schedules” beginning on page F-1.
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